Gas Prices – A Summer Decrease is Still a Possibility
New Jerseyans continue to see rising gas prices this spring, but there are now predictions which may soon spell good news for drivers.
Jeff Pelton, senior petroleum analyst with GasBuddy.com, said there is a lot of raw material lying around, waiting to be refined.
"The glut of crude is still out there, and when that crude becomes refined gasoline product, we are going to see gas prices drop," Pelton said. "I just think that it is going to take a little longer than we anticipated."
Pelton said by Father's Day, prices should be about 10 cents a gallon less than they were on Mother's Day.
"Getting closer to Father's Day, we should start, kind of, going over the mountaintop and coming back down," he said.
Another factor that Pelton pointed out is storage capacity, saying the petroleum industry does not have the capacity for gasoline that it has for crude oil, another reason for the price drop.
So where are prices going in New Jersey? According to Pelton, the average in New Jersey right now is about $2.55, but some stations are pumping at prices in the $2.26 to $2.33 range.
As always, there are some factors that could change the timetable of prices settling lower. According to Pelton, refineries are always a big issue.
"On the East Coast, we are actually much luckier than our friends out in California, who have been dealing with refinery issues for the last couple of months," he said. "Their gasoline prices, believe it or not, have gone up. Within a week, they go up 70 or 80 cents sometimes, based on their refinery issues."
The approach of hurricane season is another negative omen.
"Any time you have hurricanes, they are going to disrupt the rigs, and that is going to disrupt the supply," Pelton said. "Any type of crimp in supply could see fuel prices rise briefly -- but again, these should be really, real small, little blips."
Pelton thinks lower prices should come around definitively in July and August.